TMI Blog2022 (6) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... ing proceeding u/s 147 approval of commissions of Income Tax was obtained on 29.03.2010, however, the reason for belief that income has escaped assessment were recorded on 30.03.2010 after obtaining the approval for issuing of notice u/s 148 - Therefore, we consider that initiation of proceeding u/s 147of the Act in the case of the assessee is not valid, therefore, we quash the issuing of notice u/s 148 of the Act. Since, we have set aside the proceeding u/s 147, therefore, other ground of appeal of the assessee not required any adjudication. Accordingly, appeal of the assessee is allowed. - ITA No.4486/Mum/2013 And ITA No.1014/Mum/2015 And ITA No.5185/Mum/2014 - - - Dated:- 31-5-2022 - Shri Vikas Awasthy, Judicial Member And Shri Amarjit Singh, Accountant Member For the Appellant : J.D. Mistry And K.A. Damania For the Respondent : Achal Sharma And S.N. Kabra ORDER PER AMARJIT SINGH, AM: All these appeals were filed by the assessee against the order passed by the ld. CIT(A) for A.Ys. 2003-04, 2004-05 2005-06, respectively. Since, identical issue on similar facts are involved in all the appeals filed by the assessee, therefore, for the sake of conveni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following ground: (i) In the revised return of income, for AY 2006-07 in Note No.1, the assessee company has submitted as follows: Excess provisions written back in the other income‟ includes an amount of Rs.13,51,97,627/written off that has been provided by the assessee on capital purchases (SAFE under Sea Cable}. This amount has been reduced from the block of the assets from the current year. In the reassessment order the A.O has reproduced the submission of the assessee made during the course of assessment proceeding for A.Y. 2006-07 wherein vide letter dated 29.12.2008 the assessee explained that it had claimed a deduction of Rs.13,51,97,627/- for reversal of the provisions made in the earlier years towards capital advances since the same being not a trading receipt. This amount was capitalized during April, 2002 under the head plant and machinery on the bonafide assumption that the liability would be payable by it. However, during F.Y 2005-06 on the review of the liabilities, it was discovered that out of the provisions made of Rs.16,57,48,126/-, only a sum of Rs.3,05,50,499/- was found to be payable resulting in the reversal of liability of Rs.13,51,97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which had agreed for constructing and maintaining optical, fiber submarine cable system linking Europe, West Africa, South East Asia. As per the consortium agreement dated 17.06.1999 the total share of the assessee in the investment was determined at US Doller 50 million (Indian Rs.2,36,82,10,028/-). The ld. Counsel also explained that installation of the SAFE cable was completed during F.Y. 2003-04 and same was also put to use during that year. The ld. Counsel contended that the A.O has reopened the case on change of opinion as the full facts of the matter detailed information were furnished during the course of assessment for A.Y. year 2003-04. The ld. Counsel also submitted that the case of the assessee was reopened by issuing of notice u/s 148 after 4 year from the end of relevant assessment year. The ld. Counsel has filed a paper book comprising copies of document and details pertaining to assessment for A.Y. 2003-04 to A.Y. 2006-07 filed before the lower authorities. The ld. Counsel referred page no. 9 of the paper book comprising form for reopening the assessment for initiating proceeding u/s 147 and for obtaining approval of the Commissioner of Income Tax and contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstead of reducing the written down value amounting to Rs.5,70,36,499/- as on April, 2005 along with depreciation amounting to Rs.7,81,61,128/- separately from the WDV of the block of plant machinery, the entire value of excess liability of Rs.13,51,97,627/- was reduced from the value of block of plant and machinery as at April 1st, 2005. However, the A.O has reopened the assessment for A.Y. 2003-04 to 2005-06 without demonstrating any tangible material establishing that there was any wrong furnishing of information by the assessee. We have also perused the judicial pronouncements relied upon by the ld. Counsel. In the case of Lintas India Pvt. Ltd. Union of India Anr., dated 14.12.2021 the Hon ble Bombay High Court held that Section 151 provides, no notice shall be issued u/s 148 by an Assessing Officer after the expiry 4 year from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied with reasons recorded by the A.O that it is a fit case for issue of such notice. The reasons should be before the commissioner before he express his satisfaction by according the sanction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court of Rajasthan in the case of CIT VS. Shivratan Soni, dated 14.09.2004 held as under: Whether where satisfaction of Assessing Officer for formation of belief that income as escaped assessment to tax is a condition precedent for assuming jurisdiction, requirement of recording reasons before issuance of notice under section 148 is essential safeguard to taxpayer against illegal and unauthorized assumption of jurisdiction without such satisfaction - Held, yes - Whether requirement to record reasons before issuing notice under section 148 is mandatory and if reasons are not recorded, there is no valid assumption of jurisdiction and subsequent proceedings are vitiated - Held, yes. The Hon ble Delhi High Court in the case of CIT Vs. Tirat Ram Ahuja, dated 02.04.2022 held that a fact which comes into existence subsequent to making of the assessment cannot be a material fact within the purview of Sec. 147. The duty to disclose material facts necessarily postulates existence of a thing or material. If a material is not in existence or if a material is such of which the assessee had no knowledge, there would be no duty to disclose such material. The Hon ble Delhi High C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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